Suppose that Australian and US dollars are traded in a perfectly competitive market. Treat the price in this market as the amount of $US that can be traded for $1AUS (referred to as the US/AUS exchange rate), and the quantity traded as the quantity of $AUS traded. Suppose that the expected future profitability of US businesses increases so that the expected future return earned on owning shares in US businesses increases. The predicted effect would be:

A decrease in the US/AUS exchange rate.

An increase in the supply of $AUS in the US.

A decrease in the demand for $AUS in the US.

All of the above.